The development would nearly triple the Indian market's existing space and further raises the growing retail profile of the corridor near Packard and Platt roads.

Mukesh Patel, co-owner of Bombay Grocers, is planning to build the new store off Packard near Creek Drive, less than 100 yards away from his current site. The one-story structure is expected to cost $500,000 and have 16 parking spaces.

Patel's business has increased 10 percent this year compared with 2006 and he plans to add Chinese, Thai and frozen foods to his product lineup. He said the growth has fueled the need to expand his operations, which have been at the current store for 10 years.

"There's more business," said Patel, who co-owns the store with his wife, Bharti.

They purchased the site for $330,000 from James and Marcia Turkington on Aug. 14.

Bombay Grocers also has stores in Canton and Cincinnati. Patel's brother, Sandip, owns the Canton store and will design the new Ann Arbor location. No contractor has been selected for construction.

City officials said the development could come before the Planning Commission in January. It's a planned project, which would allow Patel to modify the setback and align the building with other businesses closer to the street, said city planner Matt Kowalski.

"It would not make sense to have them push that building back 40 feet (according to city rules)," he said.

Other developments in the area include the Packard Marketplace, an 8,200-square-foot retail center that Troy-based B&K Investments wants to start building next year, and a 14,564-square-foot Rite Aid that's under construction at the corner of Packard and Platt.

That part of Ann Arbor has developed an identity as a cultural hub, which is home to an Asian restaurant and several specialty grocers, including Euro Market and Nabalee Produce Market.

The niche businesses have sprung up in part to cater to Ann Arbor's significant Asian Indian population, which is about 3,290, or 2.9 percent of city's population.

Jim Chaconas, managing director of McKinley Commercial Brokerage, lists an office building at Packard and Platt, and expects Bombay Grocer's new site to fit in well in the area.